The Implications of Amazon’s In-Car Delivery

Amazon recently announced an extension for their Amazon Key offering: customers will be able to have packages delivered directly inside an eligible vehicle. “Millions of Prime members with Chevrolet, Buick, GMC, Cadillac and Volvo cars can now use Amazon Key to have their Amazon packages delivered inside their vehicle parked at home, work or near other locations in their address book,” the press release stated. “In-car delivery is available at no extra cost for Prime members — customers simply download the Amazon Key App, link to their connected car and start ordering on Amazon.com; no additional hardware or devices required.”

There are a few takeaways and implications from this announcement that feed into Amazon’s broader strategy.

Further developing Amazon Key

When Amazon Key was announced, there was a mixed reaction. Many saw the service as disturbing, creepy, or in other ways problematic, while others found it secure and useful. In-car deliveries, so far, seem to be more well-received than in-home deliveries were. As users are required to use the Amazon Key app, shoppers that utilize Amazon’s in-car delivery may warm up to the idea of in-home delivery in the future.

Broadening touchpoints

It’s all about the ecosystem. The more products and services you buy, the better they work together. Apple is a classic example of a fully integrated ecosystem. Have an iPhone? You can iMessage with your MacBook. Siri is on both devices, which works seamlessly with Apple Music. Love Apple Music? Buy the Apple Homepod. And so on.

Amazon has a lot to gain by broadening their ecosystem and reaching an increased number of touchpoints in their customers’ lives. As mentioned in an article earlier this week, Prime members spend 30% more than non-members, and Echo owners spend a whopping 70% more than non-Prime members. If you become accustomed to in-car deliveries, why would you order anything that wasn’t from Amazon?

Finally, let’s not forget about Alexa. If partnerships with car manufacturers are mutually beneficial, Amazon will have an easier time placing Alexa in vehicles that are Amazon Key accessible.

Reaching higher-end shoppers

Amazon Key’s in-car delivery is only available on new models of cars from Chevrolet, Buick, GMC, Cadillac, and Volvo. While the driver of a 1993 Ford might be a recurring Amazon shopper, somebody with a 2018 Cadillac is likely to make more frequent, high-priced purchases. While Amazon has long been thought of as a value-centric marketplace, Amazon Key in-car delivery may help shift this perspective by capturing more high-end shoppers.

Trust

In a world where the general public is distrusting of many tech giants, consumers are more and more open to Amazon. According to a CNBC article, customers trust Amazon because they use the data collected on shoppers to help them, as opposed to Facebook and Google.